Frequently Asked Questions

The Ohio Department of Taxation has compiled a list of frequently asked questions covering many different categories.

To view the questions, click on the "Select Category" bar and then click on the category you are interested in.  A list of questions will appear pertaining to that category. Then click on the question you are inquiring about and the answer will appear.

A taxpayer is a "statutory employee" for federal purposes receiving a form W-2 from a Limited Liability Company (LLC) that he does not own. He reports this W-2 income on federal Schedule C, but does not pay self-employment tax. Can this income be included on IT SBD line 1a?

Regardless of whether a taxpayer is considered to be a "statutory employee" for federal employment tax purposes, if a taxpayer is a "common law employee" not required to pay federal self-employment tax, his income is considered to be compensation. Compensation is not business income and therefore does not qualify for the Small Business Deduction. See ORC 5747.01 (A)(31), 5747.01(C), 5747.01(D)

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